Obama meets with Economic Team on Bank Stress Test. Washington Mutual 3 Bill Profit
source: http://www.bloomberg.com/apps/news?pid=20601103&sid=aMY3SJOyUgVs&refer=news
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President Barack Obama will get a progress report on stress tests at the 19 biggest U.S. banks when he meets today with his economic team.
Treasury Secretary Timothy Geithner, Federal Reserve Chairman Ben S. Bernanke and Sheila Bair, chairman of the Federal Deposit Insurance Corp., will attend the session. The group also will have a “significant discussion about other aspects of the economy,” said Josh Earnest, a White House spokesman.
The exams, to conclude by the end of April, are designed to show how much extra capital banks may need to survive a deeper economic downturn. While the tests are a central element of the administration’s financial-industry rescue, both banks and regulators are wrestling with concerns over how the results will be revealed and what significance investors will put on them.
“There will be much confusion as everyone tries to decide what it all means,” said Wayne Abernathy, executive vice president at the American Bankers Association in Washington. “Our worry has been that the stress tests become a new source of stress -- real-life stress.”
One concern is that a bank’s report card could leak out during earnings conference calls, which begin later this month. That could push stock prices lower for banks that are perceived to be weak.
Just how the tests, which are still under way, are revealed also remains under debate. Officials don’t want to put undue pressure on banks that need capital, while they also aren’t inclined to keep information from the markets.
4/10 7:16 AM ET ClipsFC - Wanda
Treasury Secretary Timothy Geithner, Federal Reserve Chairman Ben S. Bernanke and Sheila Bair, chairman of the Federal Deposit Insurance Corp., will attend the session. The group also will have a “significant discussion about other aspects of the economy,” said Josh Earnest, a White House spokesman.
The exams, to conclude by the end of April, are designed to show how much extra capital banks may need to survive a deeper economic downturn. While the tests are a central element of the administration’s financial-industry rescue, both banks and regulators are wrestling with concerns over how the results will be revealed and what significance investors will put on them.
“There will be much confusion as everyone tries to decide what it all means,” said Wayne Abernathy, executive vice president at the American Bankers Association in Washington. “Our worry has been that the stress tests become a new source of stress -- real-life stress.”
One concern is that a bank’s report card could leak out during earnings conference calls, which begin later this month. That could push stock prices lower for banks that are perceived to be weak.
Just how the tests, which are still under way, are revealed also remains under debate. Officials don’t want to put undue pressure on banks that need capital, while they also aren’t inclined to keep information from the markets.
4/10 7:16 AM ET ClipsFC - Wanda
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